Sector-specific curbs foreseen in credit policy
New Delhi, October 30
The bankers are gearing themselves for sector-specific restrictions in the credit policy to be announced tomorrow, especially in the fast-growing housing loan and credit card segments, while hoping that the RBI will not raise short- term lending rates for the time being.

New Delhi, October 30
India and Britain have agreed to join hands to explore areas of cooperation in the small and medium scale sector.

The Duke of York, Prince Andrew (left), with Union Minister of State Ashwani Kumar in New Delhi on Monday.
— A Tribune photograph

Micro-finance sector begs attention
Needs over Rs 50,000 cr annually
New Delhi, October 30
The Indian government may not have lost a moment in congratulating Mohamad Yunus, Nobel Prize winner from Bangladesh, who has changed life of millions of people through micro credit, but the micro- finance sector in India is still waiting for government attention.

New business model mooted
AI-Indian proposed merger
New Delhi, October 30
The proposed merger of Air-India and Indian could see creation of a special post of a group CMD for the merged entity with special business units (SBUs) to be headed by separate CEOs.

Direct flight
New Delhi, October 30
Finnish national carrier Finnair today introduced its first scheduled service between Helsinki and Delhi.

Securiry officers walk past models of passenger planes displayed at the 6th China International Aviation and Aerospace Exhibition in Zhuhai on Monday. Around 550 exhibitors from over 33 countries are participating in the
exhibition. — AFP

UPA Govt to give more powers to PSUs
Thiruvananthapuram, October 30
The UPA Government at the Centre is determined to grant more powers to public sector units, Union Minister for Heavy Industries and Public Sector Enterprises Santosh Mohan Dev said today.

Corporate
Results
Tata Motors Q2 PAT up 31 pc
Mumbai, October 30
Tata Motors Ltd has posted a 31 per cent increase in profit after tax at Rs 441.72 crore for the quarter ended September 30 as compared to Rs 337.87 crore for the corresponding quarter last fiscal.

Rupee gains 21 paise
Mumbai, October 30
The rupee today breached the Rs 44 per US dollar mark to gain 21 paise and close at Rs 44.97/98 as foreign institutional investors (FIIs) sold heavily in the market and also the 13k figure that Sensex reached today, had its bearing on the rupee performance, said a forex dealer from Development Credit Bank today.

Bank
Account
PNB Q2 net up 19.65 pc
New Delhi, October 30
Punjab National Bank has posted a 19.65 per cent increase in its net profit for the second quarter ended September 30, 2006, at Rs 504.99 crore as compared to Rs 422.04 crore for the same period last year.

New Delhi, October 30
The bankers are gearing themselves for sector-specific restrictions in the credit policy to be announced tomorrow, especially in the fast-growing housing loan and credit card segments, while hoping that the RBI will not raise short- term lending rates for the time being.

“Keeping in view that the international oil price is stable, and the inflation rate is within the target range of around 5 per cent, we are hopeful that the RBI may not raise the short-term lending rates. However, to improve the quality of credit, the RBI may impose certain restrictions on certain sectors like housing and credit market,” said Mr K.N. Prithviraj, CMD, Oriental Bank of Commerce, here today.

The bankers are expecting that the RBI may extend the date for meeting the Basel-II norms for at least another six months from March 31, 2007, though most of the banks have already moped up adequate resources from the market under tier-I, II instruments.

The bankers admit despite stricter capital adequacy norms, put up by the banking watchdog to check the astronomical rise in housing loans, it grew by almost 45 per cent to Rs 1,86,429 crore on March, 2006, against Rs 1,28,728 crore in March, 2005. It will not be surprising, they said, if some restrictions on taking a loan for the second house.

The country’s second largest public sector bank PNB has also shown 26 per cent growth in the housing loan segment in second quarter this year despite an upward revision of interest rate by over 2 per cent over the past one year.

“I don’t think there will be any change in the interest rate,” PNB Chairman and Managing Director S.C. Gupta told The Tribune. On implementation of the BASEL II norms, he said the PNB was fully prepared to implement it and if needed it could muster Rs 1,000 crore within a fortnight to meet the norms.

Earlier this month, RBI Governor Y.V. Reddy, Deputy Governor Rakesh Mohan had met a select group of bankers to
fine-tune the contours of the credit policy.

With unprecedented growth in credit cards, the RBI is also expected to come with broad-guidelines to put restrictions and ensure creditworthiness of the borrower.

Finance Minister P. Chidambaram has already indicated his priority areas-adequate credit to the productive sector, including infrastructure, manufacturing and agriculture though he would not mind if some further restrictions are put on housing loans and retail lending to moderate the growth in that sector.

The government is also worried that the people’s expectations about a further rise in interest rates is also fuelling demand in the economy, leading to higher inflation. That could be one of the reasons, say industry captains, for the RBI to defer a hike in interest rates at least till the next Budget.

New Delhi, October 30
India and Britain have agreed to join hands to explore areas of cooperation in the small and medium scale sector.

"Both countries recognised that besides collaboration among the big industrial houses, cooperation between the small and medium enterprises (SMEs) would benefit the small and medium firms in both countries through cheap labour to the British firms and technology upgradation of Indian firms," said Mr Ashwani Kumar, Minister of State for Industry, after meeting Prince Andrew.

Prince Andrew as a Special Representative of the United Kingdom for international trade and investment in on a visit to India and discussed ways to step up two-way trade and investment between India and the UK.

Talking to the reporters, he said, "the UK is looking for collaboration between the two countries and also looking for investment from the Indian companies."

Prince Andrew said there was tremendous scope for increasing the number of joint ventures and collaborative enterprises between SMEs of the two countries, particularly in engineering, textile machinery, automobile components, automobile ancillaries, electronic hardware and pharmaceutical industry in addition to the service sector.

Noting the immense contribution of the Indian diaspora in UK's economic development, Prince Andrew, the Duke of York, hoped for a further consolidation of Indo-UK relationship through the deepening of economic and political relations.

Mr Ashwani Kumar also focused upon possibilities for expansion of the Indo-UK trade and investment in manufacturing, infrastructure, IT, service sector, food processing, textile machinery and advance technology products.

Prince Andrew and Dr Kumar also discussed the possibility of opening up of legal services sector in the country as well as further liberalisation of FDI norms and reforms in the banking sector. Dr Kumar informed of the huge opportunities India offers for UK companies to invest and work in India.

New Delhi, October 30
The Indian government may not have lost a moment in congratulating Mohamad Yunus, Nobel Prize winner from Bangladesh, who has changed life of millions of people through micro credit, but the micro- finance sector in India is still waiting for government attention.

Despite government’s claims to ensure credit access to the poor sections through self-help groups (SHGs) across the country, the government has so far succeeded in providing around Rs 2,000 crore annually as against a demand of over Rs 50,000 crore by the 75 million poor households.

These facts have been brought out by a “State of sector of micro-finance” report prepared through a countrywide survey on the credit needs of the poor households in the rural and urban areas. The report will be presented at the 3rd annual Micro-Finance India to be held on October 30-31 here.

“Today a farmer has access to agricultural credit up to Rs 3 lakh annually at 7 per cent interest rate, industries can avail of tax exemptions in SEZs, and infrastructure sector is raising money through tax-exempted bonds, but the poor households have to pay up to 15-30 per cent through SHGs and 36-60 per cent to the moneylenders for meeting their credit needs, said Mr Vipin Sharma, Chief, Micro-finance, Care India, which is holding the conference in collaboration with Nabard, Sidbi and the SBI.

He lamented since the cost of raising funds was much higher, the SHGs were unable to provide credit at lower rate. There is huge demand worth over Rs 1 lakh crore for micro-finance products like small credit, micro insurance and micro pension products in the rural and urban India.

“Nabard is refinancing the loans to the banks, which offer loans to the SHGs at 9-11 per cent, resulting in 15-30 per cent final interest rate for the household,” said Nabard Executive Director S.K. Mitra.

He said since early 90s, the banks have so far financed around Rs 12,000 crore through SHGs and the recovery rate has been over 95 per cent.

The bank has helped to set up over 23 lakh SHGs covering around three crore women, mostly in Andhra Pradesh, Tamil Nadu and Karnataka.

However, the micro-finance movement, which has gained strength in some southern states besides in Orissa, West Bengal and Jharkhand, has still to pick up in the northern states, including Punjab and Haryana.

Over 500 representatives of the micro-finance institutions, banking sector and SHGs, which are participating in this international conference, have urged the government to ensure adequate credit to the poor households at reasonable interest rate, as part of its promise of providing financial services to each section.

New Delhi, October 30
The proposed merger of Air-India and Indian could see creation of a special post of a group CMD for the merged entity with special business units (SBUs) to be headed by separate CEOs.

These SBUs or divisions, to be run as independent profit-centres, are proposed to be set up in the areas of integrated passenger service covering both domestic and international operations, cargo business, ground handling, MRO (maintenance, repair and overhaul), low-cost carriers and other allied activities.

Reports emerging from the Ministry of Civil Aviation said all these proposals have been listed in the Cabinet note. It would be forwarded to the Cabinet Secretariat before getting the final approval of the Union Cabinet.

The focus of these SBUs would be to maximise revenue in the single operating company by joint sales strategy, common distribution network and outsourcing plans.

This business model also recognises the principle dissimilarities in the career progression, seniority and compensation packages for the employees of Indian and Air-India.

As part of the merger plan, the chiefs of the two state-owned carriers have already written to their respective employees seeking to allay their apprehensions regarding the job insecurity.

They assured them that HR issues were a top priority of the government and categorically ruled out any retrenchment.

The two chiefs also assured the employees that due care would be taken to protect their remuneration, perks and status and sought their cooperation in the process.

M/s Accenture, the consultants appointed for preparing the roadmap for the merger, are currently working on these issues to develop a unified approach whereby these problems could be corrected without disturbing the pay structure and seniority in both organisations, they said.

While several merger options have been suggested by the consultant, the most optimal option seems to be the merger of the two airlines into a new company.

Another recommendation of the consultants is to merge the financial books of the two companies as the shareholders are the same. The shares of the new company should be issued to the government to the extent of their shareholding in Air-India and Indian.

The merger is projected to add around Rs 1,200 crore to the
bottom line of the new entity through synergies between the two airlines in different areas.

New Delhi, October 30
Finnish national carrier Finnair today introduced its first scheduled service between Helsinki and Delhi. The first flight carrying the airlines’ Deputy CEO Henrik Arle will reach here 10 minutes past midnight tonight. Finnair would initially fly three times a week between the two cities.
— PTI

Wuxi (China), October 30
Indian engineering and technology conglomerate Larsen & Toubro Ltd today opened its first-ever electrical manufacturing facility abroad in the Chinese city of Wuxi.

The company also announced plans to establish two more ventures in China - one in the valves sector and the other in rubber.

Mumbai-based L&T has set up a wholly owned subsidiary, L&T (Wuxi) Electric Company Limited (LTW) in Wuxi, a booming city in east China’s Jiangsu province with an investment of $11 million to make high-end switchgears.

The manufacturing unit, established in Wuxi New District, a national-level hi-tech industrial park, will make high-end air circuit breakers (ACB) for which China is the world’s largest market.

The factory was inaugurated by Mr R.N. Mukhija, Chairman of LTW and whole-time Director of L&T.

The Wuxi factory will also roll out more switchgear products from the unit, Mr Mukhija said. — PTI

Bangalore, October 30
Sequoia Capital India, a leading venture capital and growth equity investor, today announced an investment of $12 million in Paras Pharmaceuticals, an Ahmedabad-based personal care company.

Paras has a portfolio of 15 successful brands, including Moov and D'Cold which were among the top ten Indian over the counter brands.

The investment was expected to take Paras to take its brands to next level. Sequoia Capital and Actis, another investor, could provide the company sound advice besides assisting in strengthening the portfolio and brands of the company, according to Mr Girish Patel, CEO,
Paras. — UNI

Thiruvananthapuram, October 30
The UPA Government at the Centre is determined to grant more powers to public sector units, Union Minister for Heavy Industries and Public Sector Enterprises Santosh Mohan Dev said today.

The Group of Ministers (GoM), chaired by External Affairs Minister Pranab Mukherjee, would look into the new proposals for giving more autonomy to PSUs at a meeting to be held on November 13, he said here.

The GoM would come out with crucial decisions on the demand of PSUs for a free hand to function in a more liberal way, he said, adding that the government had already provided more freedom to the Director Boards of various PSUs.

Restrictions on exploring business and entering into contracts had been eased and the Boards now had the authority to take decisions on their own without waiting for the ministry’s clearance.
— PTI

New Delhi, October 30
Reliance Communications today posted a net profit of Rs 702 crore in the July-September quarter on a 40 per cent increase in turnover.

The market responded positively to the results of Reliance Communications, which had posted a net loss of Rs 19 crore in the year-ago quarter, and pushed the company’s market capitalisation above the Rs 80,000-crore mark.

Reliance Communications’ revenues increased by 40 per cent at Rs 3,526 crore, a company spokesperson said.

The EBIDTA stood at Rs 1,353 crore in the second quarter, an increase of 216 per cent.

Reliance Communications recorded strong EBIDTA growth and margin expansion across all three businesses — wireless, global and broadband.
— PTI

Mumbai, October 30
Tata Motors Ltd has posted a 31 per cent increase in profit after tax at Rs 441.72 crore for the quarter ended September 30 as compared to Rs 337.87 crore for the corresponding quarter last fiscal.

Total income (net of excise) rose by 37 per cent to Rs 6,656.62 crore for the second quarter during 2006-07 from Rs 4,846.22 crore in the same quarter a year ago, the company said.

The group reported a consolidated profit of Rs 536.44 crore for Q2 2006-07 as against Rs 393.31 crore for Q2 2005-06.

The consolidated total income of the group stood at Rs 7,797.71 crore for the second quarter this fiscal as compared to Rs 5,488.13 crore during the year ago period.

SAIL Q2 net up

SAIL has said its net profit in the second quarter ending September 30 grew by 28 per cent year-on-year to touch Rs 1,443 crore.

The performance of the second quarter helped the company achieve its highest-ever first half net profit of Rs 2,829 crore, registering a growth of 26 percent as compared to last fiscal.

The revenue of the company was up 17 per cent year-on-year at Rs 9,586 crore. The revenues in the first half grew 22 per cent to Rs 17,998 crore.

SAIL Board has also accorded in-principle approval for five new projects involving a total investment of Rs 700 crore.

NTPC Q2 net up

State-run NTPC Ltd has posted a 27 per cent increase in net profit after tax at Rs 1,473.9 crore for the quarter ended September 30 as compared to Rs 1,163.5 crore for the corresponding quarter last fiscal.

Total income (net of excise) rose to Rs 7,464.3 crore for the second quarter in 2006-07, up 14 per cent from Rs 6,555.9 crore during the same quarter a year ago, the power major informed the BSE.

ITC Q2 net up 19 pc

Corporate giant ITC Ltd has posted an 18.74 per cent increase in net profit at Rs 679.60 crore for the quarter ended September 30 as compared to Rs 572.33 crore for the same quarter last year.

The total income of the company increased 31.21 per cent to Rs 2,967.12 crore for the quarter ended September 30 from Rs 2,261.21 crore for the corresponding quarter a year ago, the company said.

Jindal Steel & Power

Jindal Steel & Power Ltd today posted a 8.03 per cent increase in net profit at Rs 157.23 crore for the quarter ended September 30 as compared to Rs 145.53 crore for the same quarter last year.

The total income increased by 22.09 per cent to Rs 792.90 crore for the quarter ended September 30 from Rs 649.41 crore a year ago.

GlaxoSmithKline

GlaxoSmithKline Pharmaceuticals has posted a net profit of Rs 285.43 crore for the quarter ended September 30 whereas the same was Rs 309.33 crore for the same quarter last year.

The total income of the company was Rs 424.51 crore for the third quarter ended September 30 while the same was Rs 438.41 crore a year ago, the pharmaceutical company said.

Asian Paints

Asian Paints Ltd has posted 26.79 per cent increase in profit at Rs 77.56 crore for the quarter ended September 30 as compared to Rs 61.17 crore for the same quarter last fiscal.

The total income (net of discounts and excise) increased 26.91 per cent to Rs 794.95 crore for the quarter ended September 30 from Rs 626.37 crore for the corresponding quarter a year ago, the company informed the BSE.

The Board of Directors approved payment of interim dividend of Rs 5.50 on shares of Rs 10 each (55 per cent) for the financial year ending March 31, 2007. The company said November 6 has been fixed as the record date for the purpose of payment of interim dividend.

Aptech net up

Aptech Ltd has reported a net profit of Rs 10.66 crore for the third quarter ended
September 30 as compared to a loss of Rs 0.85 crore in the same quarter in the previous fiscal.

Global System-wide revenues of the company stood at Rs 322.15 crore as compared to Rs 169.13 crore in the same quarter last year, accounting a rise of 90 per cent.
— Agencies

Mumbai, October 30
The rupee today breached the Rs 44 per US dollar mark to gain 21 paise and close at Rs 44.97/98 as foreign institutional investors (FIIs) sold heavily in the market and also the 13k figure that Sensex reached today, had its bearing on the rupee performance, said a forex dealer from Development Credit Bank today.

Earlier, the domestic currency opened at Rs 45.12/13 and traded at Rs 45.07/08 in mid-morning trading.

The RBI today fixed the reference rate at Rs 45.09 as compared to the previous rate of Rs 45.22. However, the domestic currency closed up against euro at Rs 57.24 while it closed down against pound sterling and yen at Rs 85.52 and Rs 38.31, respectively.
— UNI

New Delhi, October 30
Punjab National Bank has posted a 19.65 per cent increase in its net profit for the second quarter ended September 30, 2006, at Rs 504.99 crore as compared to Rs 422.04 crore for the same period last year.

The bank's total income increased 13.62 per cent to Rs 3,048.32 crore for the quarter from Rs 2,682.84 crore for the corresponding period previous year.

The operating profit of the bank for the quarter stood at Rs 889 crore, up by 29.97 per cent as compared to Rs 684 crore during the second quarter this fiscal.

Asserting that the bank is poised to cross the net profit target of Rs 1,700 crore during the current fiscal, PNB Chairman and Managing Director S.C. Gupta said the bank registered a positive growth in deposits and advances despite it not adopting differential rate of interest for deposits like other banks.

The net profit of the bank for the first half of the current financial year amounted to Rs 873 crore as compared to Rs 780 crore in the corresponding period of last year.

Indian Bank

Indian Bank, which is likely to enter the capital market next month, recorded a net profit of Rs 334 crore during the first half of the current financial year ended September 30 as compared to Rs 242.14 crore during the corresponding period last year, registering 37.94 per cent growth.

CMD K.C. Chakrabarty said the operating profit increased by Rs 162.22 crore, representing growth of 44.50 per cent, to Rs 526.80 crore as compared to Rs 364.58 crore in the corresponding period last year. The net interest income improved.

Indian Overseas Bank

Indian Overseas Bank has posted a 25.87 per cent increase in net profit at Rs 249.85 crore for the quarter ended September 30 as compared to Rs 198.49 crore for the same quarter last fiscal.

The total income increased by 21.89 per cent to Rs 1524.13 crore for the quarter ended September 30 from Rs 1250.32 crore for the corresponding quarter a year ago.
— TNS, Agencies